Source: MEATINGPLACE, 10/21/11

Sanderson Farms would like to move ahead with plans to build a big-bird deboning plant in North Carolina if three conditions are met, Chief Executive Joe Sanderson told investors at the company’s annual investor day meeting.

Before breaking ground on a new plant, the company intends to pay down debt, feed costs need to come down, and political wrangling among government bodies where the plant would be located needs to be resolved, Sanderson said in remarks that were webcast.

“Those three things need to happen before we embark on that project, which we really want to do. But we have to be prudent,” Sanderson said.

The earliest the company could foresee beginning construction on the plant would be fall of 2012, Sanderson said.

Sanderson Farms earlier this year announced it would delay plans to build the proposed plant in the Nash County, N.C., area as high feed costs hurt profitability.

Sanderson said the Rocky Mount, N.C., site is the company’s first choice of location for building a second North Carolina plant but it is considering alternative locations as well. Wilson County, which opposes construction of the plant, has filed an appeal challenging a court victory by Nash County that could take up to a year to be heard, he added.

Sanderson said the economy — and with it, demand — will eventually bounce back.

“We are confident that in the future, this economy is going to turn, people are going to get their jobs back, and they are going to go back out to eat again,” he said.

Regarding industry production cutbacks, Sanderson Farms Chief Operating Officer Lampkin Butts said that while egg sets are trending lower, the industry has yet to see a big drop in pullet placements.
“We believe that those reductions in egg sets will impact our market after Thanksgiving. We won’t know until we get there, but we do believe December and January will be a better pricing environment for us,” Butts said.

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